Story link: http://www.goodnewsindia.com/index.php/Supplement/article/a-turnaround-story-from-assam
When Mr Anjan Datta took over as the Transport Minister of Assam two years ago the Assam Road Transport Corporation (ASTC) was a basket case. Today it is a profit making outfit. How did he do it? Here’s a lesson from a politician that is worth the attention of many B-School graduates.
First let us see where Datta started: total debt was Rs.120 crores and 74 employees per bus. Incredible though it may seem, some of them had not been paid for 18 years! Given that fact it seemed a good idea to tempt them with a voluntary settlement scheme (VRS), by which at least the employees stood the chance of getting one large payment in full settlement. The ploy worked and today the ratio of employees per bus is 9:1.
But the retirees had to be paid. How did Datta manage that? He looked into his stores and workshops and found enough old tyres, battery cases and overstocked spare parts that could be sold off to raise some initial capital to work with. He also leased many of ASRT’s workshops, godowns and spaces to rent paying tenants.
Datta then worked an ingenious way around the lack of new investment capital. He brought in private investors to buy and run buses that would sport ASRT’s flying rhino logo. The idea was brilliant because a small private entrepreneur could fund a single bus easily and get into business and ASRT would not lose management control. Datta had unbundled a big and impossible shopping list and parcelled it out. Private investors not only paid for the buses but also a one-time entry fee plus monthly commissions. There are today 1200 buses plying under this scheme earning ASRT Rs.85 lakhs per month. They work under ASRT’s strict supervision. When those that you supervise are not a part of a unionised mass, service quality invariably improves as it has done in Assam.
With steady money coming in, Datta began paying off the workers opting for the VRS. Having put it on operational mode, Datta turned to making profits. He seems a serial innovator! He began selling lottery tickets to his long distance travellers. In the beginning the prizes were small: at the end of the journey if you had won, the return journey was free. Once the idea caught the fancy of passengers prizes have gotten bigger: television sets and now even cars! Of course Mr Datta’s lottery tickets are getting more expensive too!
ASRT is becoming a savvy marketer. It now makes tidy profits selling soft drinks and food and running a courier service. The good politician that he is, Datta has not overlooked his social concerns. Because of the many privately owned buses, small workshops and body building units have appeared all over the state in replacement of the earlier centralised dysfunctional state behemoths. Datta has decreed that these must employ diploma holding technicians from the state ITIs. 5000 jobs have been created for them. He has also worked to improve road safety with surprise checks on his buses and mandatory re-test at the time of renewing driving licences.
The report in NewsFileDelhi on which this article is based, says, when Datta first declared his intentions, it was dismissed with the Assamese phrase, “gosat goru utha kotha” ("as likely as a cow climbing a tree"). But with a current net profit of Rs.15 crores, Datta’s cash cow seems to have leapt over the moon. And that feat is visible from afar: officers from road transport corporations in Karnataka, Andhra Pradesh, Maharashtra and West Bengal are making a beeline to Guwahati to study the miracle.
This story was referred to GoodNewsIndia by reader Bikram Barua. His friend Partha Gogoi next spent considerable time to track down the source to NewsFileDelhi. Kuntil Baruwa of that paper then waived the rights to the story in return for crediting it as the source, which is hereby made. This article however is a total rewrite by GoodNewsIndia based on the NewsFileDelhi report.